Mid-Majors Need To Be Paid First By NCAA Before Sports Cut, Reduced

When it comes to securing the money they are owed from the NCAA the schools that make up the Group of 5, mid-majors like Georgia State, better not be potted plants. The smaller conferences better ask loudly, and ask over and over, for the money they earned for making the NCAA Men’s Basketball Tournament.

The NCAA was going to get $830 million from CBS and Turner in April for 2020 March Madness, plus more than $150 million from sponsorships and tickets sales, which would go toward paying mid-majors for past appearances. The tournament was cancelled because of the pandemic, which is lost revenue approaching $1 billion.

The NCAA Tournament, which accounts for at least 90 percent of the NCAA headquarters budget, doesn’t exist without the mid-majors and smaller schools. They are the Cinderellas who make the tournament compelling and worth so much damn money.

So when the NCAA’s business interruption insurance kicks in, it would be a nice gesture from the Power 5 to put the mid-majors first in line.

How much is GSU owed?

In an email response to Forbes, Georgia State athletic director Charlie Cobb said,

“In years after we compete in the NCAA tournament, we receive $150,000 from Sun Belt Conference distribution as Men’s Basketball share plus a bonus of 50% of shares earned for that one immediate year, so with it being one share earned last season (2019 appearance), we receive an additional $140,000 under normal circumstances. So, we are scheduled to receive a total of $290,000 as part of our conference distribution.”

Cobb added, “This is subject to change, but no one knows how much at this moment.”

According to the NCAA’s Revenue Distribution Plan for 2020, there was approximately $167 million set aside for “basketball performance”, which is the money earned for making the D-1 tournament. Georgia State will likely have to take a percentage of what they are owed with the rest paid later.

None of the mid-majors should get a haircut on this.

There are hints out there from athletic directors at mid-majors that the tourney cancellation could result in sports being cut, or some scholarship money being reduced. They all saved money from the cancelling of spring sports, but their schools are also offering refunds to students for the cancelling of meal plans, and dorms being closed. Many mid-majors get some athletic money from student fees. How might the belt tightening impact athletics? It will.

Two important things to consider.

Most of the NCAA’s haul from CBS/Turner pays for 89 championships in other sports sponsored by the NCAA, not just the Men’s Basketball Tournament. That money also helps pay for scholarships across Division I, II, III. Money goes to athletes who enrolled in grad school. It also goes to a student-assistance fund to help athletes in need, and there are many in Division II and Division III.

The NCAA hands out more than $600 million to members that has nothing to do with March Madness.

Here is what else: the NCAA is advising schools to give athletes a replacement year for losing the spring season to the pandemic. That is more financial stress for smaller schools.

Cobb did not say sports teams are under threat of being cut. He is no alarmist.

But if anyone deserves to be paid first when the NCAA is whole it is the Georgia States and other underdogs.

That $290,000 to GSU wouldn’t seem like much money to, say, the University of Georgia with athletic department revenues of $176.7 million. The Panthers’ athletic revenues, according to 2018 figures from the Knight Foundation, were $39.5 million.

The SEC cut checks to each of its schools for $44.6 million in late summer, 2019. The SEC and the other big schools also get most of the money from the College Football Playoff.

The big schools are over-spending for coaches, $6 million to $9 million. They are paying assistants over $1 million. They keep building new facilities because entitled 18-year olds want the new and the next.

The Power 5 schools could lose $2 million to $5 million in revenue with the cancelling of the tournament. The University of Texas had revenues of $219 million in 2018. UT spent $217 million of that.

It’s true, Georgia State is going to save six figures from not playing its spring sports. But so are the big schools. The mid-majors will be impacted more and the NCAA should make sure the mid-majors are thrown a lifeline….first.

This calamity wouldn’t have been a problem six years ago. Reports from USA TODAY said a NCAA rainy day fund swelled to $400 million from 2004-2014. Then it went away, mostly because no one thought the NCAA should have that kind of cash laying around. More than $200 million went to a legal settlement over athletes rights. Under pressure, the NCAA disbursed to schools for Full Cost of Attendance for athletes. It also contributed millions to a “concussion” fund for athletes.

The mid-majors do not all have the capital to absorb a $290,000 hit to their bottom line, but Cobb isn’t panicking and he doesn’t do politics. This is what he said about the idea of a shortfall and the risk to future earnings:

“Obviously, all of us are concerned about the financial implications of the pandemic, but there is no sense to fear the unknown. We will make adjustments and move forward. There are so many moving logistical pieces to this that our focus right now is solving issues for our student-athletes, especially our seniors, to continue their learning this spring semester and communicating with our staff about campus-related directives.”

This is a random demand for the big schools to make do with less, but they should absorb more of the shortfall. They use up NCAA resources by committing the biggest infractions in recruiting, which leads to expensive investigations and legal bills. Sure, mid-majors bend rules, but their boosters are not handing out $100,000 to players because those players are good enough to get that cash in high D-1.

The Power 5 Hall of Fame coaches condone cheating by signing freshmen whose parents, or caretakers, have taken payments from agents and shoe companies. Big schools have to buy their way out of contracts of failed coaches because of a lack their visibility leads to a lack of patience.

The high majors presidents—with the exception of Louisville—aren’t doing much about the hijinks.

The NCAA paying mid-majors first won’t happen for a number of contractual reasons, but it should. The Power 5 should pause and consider what March Madness would look like without programs like Georgia State as part of the bracket.

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